SINGAPORE (Oct 20): The Monetary Authority of Singapore (MAS) says a simplified regulatory regime for managers of venture capital (VC) funds will come into immediate effect, following public consultation on the proposal earlier this year.
See: Singapore plans to ease VC rules to promote startup financing
This regulatory regime will simplify and shorten the authorisation process for VC managers, as directors or representatives with at least five years of relevant experience in fund management are not required anymore.
The VC managers will also not be subjected to capital requirements and business conduct rules that currently apply to other fund managers.
In admitting and supervising VC managers, MAS will focus primarily on existing fit and proper and anti-money laundering safeguards under the Securities and Futures Act, retaining regulatory powers to deal with errant VC managers.
In this simplified regulatory regime, the extent of contractual safeguards that are already present in typical contracts negotiated by VC managers’ sophisticated investor client base will be taken into account.
Meanwhile, in order to qualify for the VC manager regime, the VC manager has to manage funds that invest in business ventures that are not listed on a securities exchange; invest at least 80% of committed capital in securities that are directly issued by startups that are no more than 10 years old; units of the funds are not available for new subscription after the close of fund-raising, and can only be redeemed at the end of the fund life; and are offered only to accredited and/or institutional investors.
Lee Boon Ngiap, assistant managing director of Capital Markets, MAS says, “The simplified VC manager regime recognises the lower risks posed by VC managers given their business model and sophisticated investor base. It will enhance the operating environment for VC managers to play a greater role in supporting start-up and growth stage businesses.”
